BEIJING/HONG KONG (Reuters) - Nasdaq, the No. 2 U.S. stock
exchange, set up shop in Beijing on Monday as it looks to
attract more Chinese firms to list on the exchange instead of
alternatives such as Hong Kong.

Stock exchanges around the world are trying to lure Chinese
firms to list with them as investors seek to capitalize on the
rapid growth of the world's fourth-largest economy.

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Nineteen have joined Nasdaq so far this year, compared with
nine in 2006, and there will be at least one more listing this
year, Guang Xu, Nasdaq's chief representative for China, told a
news conference.

"We've got a very strong pipeline," Xu said of the
prospects for Chinese listings in 2008, but he declined to put
a figure on it. Energy-related companies could be especially
active, he said.

Xu, who will head the Beijing office, said Nasdaq itself
would consider listing its shares in Shanghai if China changes
its regulations to permit listings of foreign companies.

Nasdaq reached deals this year to take over the
Philadelphia and Boston exchanges and to buy Nordic market
operator OMX jointly with Borse Dubai.

Stepping up its Asia-Pacific presence would complete
Nasdaq's global reach, Eric Landheer, the company's head of
Asia-Pacific, told Reuters in Hong Kong.

"The major piece that's still not there is Asia," Landheer
said, adding: "China is our most important market right now."

TOUGH COMPETITION

While Chinese listings on Nasdaq have accelerated, the
bourse still lags far behind Hong Kong as the preferred place
for mainland firms to raise funds overseas.

Forty-nine have listed in Hong Kong this year, raising
US$28.6 billion, according to Dealogic. They include e-commerce
firm Alibaba.com, which snubbed the U.S. market for a US$1.5
billion Hong Kong flotation.

Stricter U.S. corporate governance rules mandated by the
Sarbanes-Oxley Act passed in the wake of the Enron and Worldcom
scandals have been cited as a reason why some Chinese firms
have chosen not to list in the United States.

But Nasdaq Vice-Chairman Michael Oxley, who co-authored the
legislation when he was a congressman, said the regulations
have not proved to be a showstopper.

"Some of the Chinese companies that have listed have
exceeded the requirements of both our listing standards and
Sarbanes-Oxley," he told Reuters.

Nasdaq also faces competition within China, as Beijing
redoubles its efforts to build its own Nasdaq-style board.

China agreed late last year to let the New York Stock
Exchange and Nasdaq open offices in Beijing as part of deals
struck during the first round of a high-level "strategic
economic dialogue" with the United States.

NYSE Euronext <NYX.N>, parent of the New York Stock
Exchange, said on Monday it would open its Beijing office on
December 11, the eve of the next round of the strategic
dialogue.

Treasury Secretary Henry Paulson will lead the U.S.
delegation to the talks, which will take place near Beijing.

Washington is likely to press Beijing to raise the caps
that now limit foreign investors to minority stakes in local
banks and financial firms. China has already promised to lift a
moratorium by the end of the year on new foreign brokerage
joint ventures.